TLDR
- Bank of America CEO Brian Moynihan warned that up to $6 trillion in bank deposits could move to interest-bearing stablecoins, citing Treasury Department studies
- The potential shift represents roughly 30-35% of total US commercial bank deposits and could reduce banks’ lending capacity
- Senate Banking Committee postponed markup of crypto bill scheduled for Thursday to allow more bipartisan negotiations on stablecoin yield provisions
- Current draft bill bans passive interest on stablecoins but allows activity-based rewards like staking and liquidity provision
- Coinbase withdrew support for the bill, saying provisions would eliminate stablecoin rewards and favor traditional banks
Bank of America CEO Brian Moynihan told analysts during a Wednesday earnings call that $6 trillion in deposits could leave the US banking system if stablecoins are allowed to pay interest. The figure comes from Treasury Department studies and represents roughly 30-35% of total US commercial bank deposits.
Bank of America, CEO warns up to $6 trillion in deposits could shift to stablecoins if allowed to pay interest by The CLARITY Act. pic.twitter.com/PU9BAIBrQw
— Stablecoins.eth (@Stablecoins_eth) January 15, 2026
Moynihan explained that interest-bearing stablecoins function like money market mutual funds. These products hold reserves in short-term instruments such as US Treasurys rather than lending the money out.
This structure keeps funds outside traditional banking. When deposits leave banks, the institutions lose their ability to make loans to households and businesses.
“If you take out deposits, they’re either not going to be able to loan or they’re going to have to get wholesale funding, and that wholesale funding will come at a cost,” Moynihan said. The shift would particularly impact small and mid-sized businesses that rely on bank loans rather than capital markets.
Legislative Battle Over Stablecoin Yields
The debate centers on the latest crypto market structure bill released by Senate Banking Committee Chair Tim Scott on January 9. The draft includes provisions that prohibit digital asset service providers from paying interest to users who simply hold stablecoins.
However, the bill creates an exception for activity-based rewards. Users could still earn incentives tied to staking, providing liquidity, or posting collateral.
The distinction aims to prevent stablecoins from competing directly with traditional bank deposit accounts. Banking groups argue that yield-bearing stablecoins function as unregulated investment products.
On January 7, the Community Bankers Council sent a letter to lawmakers warning that $6.6 trillion in bank deposits could be at risk. The letter stated that if billions leave community bank lending, small businesses, farmers, students, and home buyers would suffer.
The banking group argued that crypto exchanges and stablecoin companies are not designed to fill the lending gap. They also cannot offer FDIC-insured products like traditional banks.
Senate Delays Markup as Industry Splits
The Senate Banking Committee postponed its markup of the crypto bill that was scheduled for Thursday. Chair Tim Scott said the delay allows for further bipartisan negotiations but did not provide a new date.
The postponement followed a similar move by the Senate Agriculture Committee, which pushed its crypto bill markup to January 27. Over 70 amendments were filed ahead of the Banking Committee’s planned session.
The crypto industry remains divided on the current legislation. Coinbase CEO Brian Armstrong announced Wednesday that his company could not support the bill in its current form.
Armstrong said the draft would “kill rewards on stablecoins, allowing banks to ban their competition.” He stated Coinbase would “rather have no bill than a bad bill.”
Other industry leaders take a different view. Chris Dixon, managing partner at a16z Crypto, said Thursday that while the bill is “not perfect,” advancing the CLARITY Act is necessary for the US to remain a leading hub for crypto innovation.
Banking groups continue to lobby against any loopholes that would allow yield to reach stablecoin holders. They warn that large-scale deposit migration would raise borrowing costs across the financial system.
Scott stated that “everyone remains at the table working in good faith” following Wednesday’s postponement announcement.
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